Exporters and Limón business interests push for Chinese loans

Business organizations from the Limón areas and some lawmakers are pressing for approval of a big loan from China to widen the key Ruta 32.

Walter Céspedes Salazar of the Partido Unidad Social Cristiana and Edgar Quirós, president of the Asociación Nacional de Productores Independientes de Banano, held a press conference Wednesday at the legislature in which they urged approval of the deal. Truckers, pineapple producers, banana growers and other exporters also back the bill.

Over the weekend Luis Guillermo Rodríguez Bastos, president of the Agencia para Desarrollo de Limón, released a letter asking lawmakers to do likewise.

The $465.6 million project would make Ruta 32 four lane from Limón to Rio Frio, some 107.2  kilometers, a little more than 66 miles.

In terms of legislative action, the proposal is moving at light speed. The bill was introduced by Casa Presidencial only Oct. 16. The measure is being studied in the legislative finance committee, the Comisión Permanente de Asuntos Hacendarios

The Export–Import Bank of China would make two loans, one for $100 million and one for $296 million. Costa Rica is putting up $90 million, including an extra $20 million for expropriating property and relocating public services. The larger loan would be at 4 percent interests, and the smaller one at 2 percent.

Oviedo. The paperwork is incorporated as proposed law No. 18.945.

The agreement specifies a direct award to the Chinese firm without competitive bidding. The contract also said that all rights and obligations under the contract will be interpreted in conformity of Chinese law. The measure before lawmakers also says that material to be used in road building can be imported without the payment of customs duties. Costa Rica also would renounce any immunity it may have for being a sovereign state.

The proposed contract is a highly experienced public Chinese  company specifically designated for the project by its government.

Casa Presidencial also made a persuasive case for the project in the summary given lawmakers. Aides and ministers continue to lobby for the bill with lawmakers. Banana growers export $760 million in products a year, and pineapple growers sent out $791 million in 2012, they said. And the current highway was built between 1978 and 1987, they added.

Casa Presidencial says in the summary that the project would improve the country’s competitivity rating. It also noted that an independent study, paid for by the Interamerican Development Bank, estimated that the job should cost about $395 million but also said that the actual price could be 25 percent of that price either way. The contract with the Chinese firm falls within that range, and the price is fixed.

The speed of the project also might be an illusion because the Ministerio de Obras Pública y Transportes has been working on the project for a long time. Reconstructing the road is in the government’s long-term highway plan, and the project was mentioned as a possibility in March 2011 along with many others.

There is some real concern in Limón that the deal with the Chinese might be sidetracked. Oviedo, the lawmaker, for example, has promised a constitutional appeal.

The letter from the Limón development agency points out the problems with other road projects.

Other regions, like San Carlos in the northern zone have fought for decades to have a new highway and with this deal the Caribbean and the country will not have to experience this financial, legal and bureaucratic torment, said the letter.
The reconstruction is supposed to take 42 months. No final legislative action is expected for several months.

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